The Government has agreed in principle up to £50m of exceptional financial support for Lambeth LBC for 2023-24 and 2024-25.
Lambeth joins 19 other local authorities that have agreed in principle capitalisation directions.
The council’s financial difficulties are in part related to costs associated with a redress scheme for historic child abuse cases.
Lambeth said increased numbers of people coming forward to access the scheme drove up costs from £125m to between £155m and £172m.
A report by the Chartered Institute of Public Finance and Accountancy found Lambeth had ‘robust arrangements and processes to ensure sound financial and risk management and sustainability'.
However, it recommended the council ‘reinforces the need to deliver on its savings programme and continues to hold directors and lead members to account for delivery'.